Author Topic: Kids school vs. financial freedom  (Read 4236 times)

piercrab

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Kids school vs. financial freedom
« on: May 23, 2016, 06:23:22 PM »
I have been reading posts on this Forum for several years, and this is my first post.

I live in San Francisco bay area where housing prices are crazy.  We are deciding whether to move back to our smaller home (1150 square feet) so that we can sell our McMansion (3740 square feet; 5 beds; 4 1/2 baths).  Both homes are paid for so mortgages are not the question.  We have been living in our McMansion for 14 years because of great school district.  Thanks for the craziness in the bay area, the price on McMansion sky rocketed. My daughter completed high school 2 years ago and currently enrolled in local university.  My son is a Sophomore High school.  The McMansion is 4 doors down from high school where my son can walk to school easily.  If we sell the McMansion and move to smaller home, he can still attend current high school by inter district transfer assumes he keeps up his grade.  If his grades are bad, he has to attend the assigned school which is not that great. Distance wise, the smaller home is 7 miles away from the current high school so someone has to drop him off.

I live with my elder parents.  My mom pass away last January so my dad still struggling with her lost.  I think it would be better for him if we move. 

Both my husband and I work 6-days a week.  I work in high tech industry.  My husband is a business owner.  We are frugal by nature and was able to purchase the McMansion after 911.  Looking at the overpriced house prices where 80% people who live and work here can't afford to buy, we are afraid of another housing crash. 

We are also not in good health.  Husband has kidney cancel in 2011.  He is cured and not on medication but there's always a chance of cancer coming back.    I have Rheumatoid Arthritis for 25 years now.  It just get worse over the years.  We want to retire early and move to Orlando after my son complete his school.

We have been planning to stay at the McMansion for another 2 years, but now the price seems to be right.  I struggle with the idea that I'm choosing my financial freedom over my son's education.  Husband wants to sell but I'm still undecided.
 
My story seems small compare to other people's issues.  Down-sizing and stay in the same area is hard.  How will my son re-act?  He may think I don't care about him.

Any suggestions is appreciated.  Thanks for reading !!


Sailor Sam

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Re: Kids school vs. financial freedom
« Reply #1 on: May 23, 2016, 06:31:37 PM »
Have you sat down with your son, and asked his opinion? Unless he's on an accelerated schooling track, he should be 15-17 years old, which is plenty old to have a thoughtful opinion. With the added bonus of giving him a real-life example of how to think about money, and how to make informed monetary decisions.

If you do decide to move, a 7-mile commute between house and school doesn't seem insurmountable. Either public transportation, or access to a parentally provided car.

MsPeacock

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Re: Kids school vs. financial freedom
« Reply #2 on: May 23, 2016, 06:36:10 PM »
Hi Piercrab - Is your main reason for staying in the large house is so that your son can finish high school and not have the commute and move to deal with? There is a lot to be said for being close to the school and his friends and activities.

If there was a housing crash - and lets say your house lost 25% of of it's value - would you still be ahead from what you bought it for? Would you still be able to afford to retire?

Tjat

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Re: Kids school vs. financial freedom
« Reply #3 on: May 23, 2016, 06:36:30 PM »
Agree with Sam. 7 miles isn't that far. Seems like you're drastically increasing your time to FIRE with little downside.

Bracken_Joy

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Re: Kids school vs. financial freedom
« Reply #4 on: May 23, 2016, 06:37:17 PM »
Ask your son. My parents sold and moved when I was a sophomore in HS. 8 miles away. I continued to bike daily. I hold no bitterness and resentment toward them, but a big part of why is that they discussed it with me and asked my opinions. They explained their reasoning- my dad thought housing prices would go down soon. He was right. They sold near the top of the market, doubling the value of the home over when they bought. It's now easily 1/3 less than when they sold. Far from being resentful, I'm glad they made the choice they did, to ensure their future financial security and help prevent us kids from financially supporting them in the future (I would, but it is really nice not to have to).

Anyway, your son is old enough to understand finances, or he should be. Talk to him about the what and the why. Listen and weigh his answer. That isn't to say go along with whatever he thinks, but involve him in the conversation. He's a stakeholder, and his views might surprise you. Good luck!

Sturton

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Re: Kids school vs. financial freedom
« Reply #5 on: May 23, 2016, 06:41:00 PM »
Is your reason for wanting to move that you think the McMansion may lose value if you don't move now?

I have to say that being next door to school, and not having to ferry your son back and forth, is a big advantage.  I assume he will be able to keep his grades up, but if not and he has to move to the worse school, that could also be a big disadvantage.  I'm not clear on why it would be better for your father if you moved.  He lives with you?  Generally too much change after a death is even more disorienting.  If he is elderly and has memory issues, moving now may be even more disadvantageous - this can provoke a greater disorientation.

I myself don't think prices will decline greatly over the next two years, though of course I can't see the future.  But it sounds to me as if you should wait it out, and move after your son has graduated.  That's what I would do if I were in your positiion, with the information I have.

Sibley

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Re: Kids school vs. financial freedom
« Reply #6 on: May 23, 2016, 07:27:45 PM »
Another vote for talking to your son. Have multiple discussions, over a period of time, to allow everyone to digest and come back with thoughts. Include your daughter and father in the discussions as well - they have an emotional stake in it as well.

mxt0133

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Re: Kids school vs. financial freedom
« Reply #7 on: May 23, 2016, 08:03:13 PM »
For those who say that 7 miles in nothing in SF proper that is literally on the other side of town, since SF is only 49 square miles.  Commuting during school hours will probably be about 50 minutes by car and up to an hour via public transportation if there is no express service.  And that's if there is no major traffic. It's not like driving in the suburbs where 7 miles is closer to a 20 to 30 minute ride.

seattleite

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Re: Kids school vs. financial freedom
« Reply #8 on: May 24, 2016, 07:36:05 AM »
Another option is to sell the house and rent a house near the school for two years. You'll be able to "lock in" the sale price and still allow your son to be close to school. Rent here in the Bay Area sucks, I know, I rent here myself, but you might still be better off.

I would talk with your son about selling. If he doesn't like school you might also consider spending the next two years traveling the world with him since you'll no longer need to work and have him finish high school by taking the GED. Assuming he's into that thing. A sophomore in high school might be more interested in friends at school and the girls there than spending time with his family traveling.


nereo

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Re: Kids school vs. financial freedom
« Reply #9 on: May 24, 2016, 08:26:32 AM »
While I agree that you should talk to your son, I think this is your decision to make and from what you've described it sounds like you should sell now and get out. 
Let's review...
You say you are not in good health
You think it would be best for your dad if you moved
You want to move to Orlando soon
You work 6 days a week currently
Daughter is in college, son is (finishing?) his sophomore year in HS

To me there's really only two legitimate options:  1) move to your smaller house now and find a way for your son to keep attending his high school for the next two years.  Sure it may take him 45 minutes each way to get there, but that's not necessarily a bad thing - he can learn early what a long commute feels like... I had a similar commute on a bus every day in HS to go to a magnet school.
2) sell both houses and move to Orlando this summer.  Yes it would mean your son would need to finish his final two years in a different school, and only you know how well he'd adapt.  But as long as he doesn't absolutely hate the idea it can be good for him too... he may decide he loves Florida or he can set his sites on returning to California for college in two short years.

Given your work schedule, your health problems, your father's loss and the age of your children I would NOT stay in your current house any longer.


Axecleaver

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Re: Kids school vs. financial freedom
« Reply #10 on: May 24, 2016, 09:34:15 AM »
There seems to be a strong case for selling. Giving your son a motivator to keep his good school - keep your grades up or else you'll be forced to move schools and lose all your friends - sounds like a plus to me, not a minus. You are not choosing between your son's education and financial freedom, because all that changes is a longer commute.  The new commute is inconvenient, but we're talking about a lot of pros to offset that one con. The other factor is if you're both working six days a week, and have health challenges, there's little time left to maintain a big property. You must be paying a lot to keep your property maintained with lots of contractors and services to manage.

Talk to the family about it and see what they think, but it seems like a great idea to sell now and start downsizing. Getting it on the market now seems wise, close in July or August and the new buyer is ready for the next school year to start. That should maximize your marketability.

A third choice of selling both properties and renting for two years is another possibility. This would allow you to prepare for the empty nest situation, and maybe find a rental that improves the situation for everyone.

little_brown_dog

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Re: Kids school vs. financial freedom
« Reply #11 on: May 24, 2016, 09:39:12 AM »
I don't understand how you are choosing your finances over your son's education if he can still attend the same school. A 7 mile commute (15min?) commute is not very far at all unless you are talking about sitting in hours of traffic. In fact, it may be a great incentive for him to keep working hard to get good grades if that means he can stay at his school with his friends. I personally never minded being dropped off or driving myself a few miles to school every day when I was in high school. By junior/senior year many kids have cars and can pick up friends/hangout without adult help, so driving a few miles isn't a big deal to them.
« Last Edit: May 24, 2016, 09:40:45 AM by little_brown_dog »

nereo

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Re: Kids school vs. financial freedom
« Reply #12 on: May 24, 2016, 09:45:42 AM »
I don't understand how you are choosing your finances over your son's education if he can still attend the same school. A 7 mile commute (15min?) commute is not very far at all unless you are talking about sitting in hours of traffic.

To be fair, a 7 mile commute in SF during rush hour is going to be closer to 30-45 minutes, depending on where exactly you are going.

Sturton

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Re: Kids school vs. financial freedom
« Reply #13 on: May 24, 2016, 09:52:56 AM »
7 miles is never going to be 15 minutes away unless you're talking no neighborhood streets.  My kid's school is 2 miles away in a small town and that takes us 15 minutes by car, what with traffic, about a dozen stop lights, and narrow streets with low speed limits.  If the OP said how long the commute would take, we could judge the situation better.  My bet is that in San Francisco, 7 miles is going to take a long time.  And would someone have to drive him there and back every day?  Buses are going to take even longer than cars, and even a "short" 30-minute commute is an extra 2 hours in the car each day.

ohmylookatthat

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Re: Kids school vs. financial freedom
« Reply #14 on: May 24, 2016, 10:07:01 AM »
won't he be driving soon too?

piercrab

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Re: Kids school vs. financial freedom
« Reply #15 on: May 24, 2016, 06:16:20 PM »
In the last recession, the McMasion lost 33% of its value (~$500k).  Right now the bay area housing prices are crazy again.  We fear of another collapse that would wipe out all equity in the home.

Although the distance between small house and school is 7 miles, it takes about 35 minutes driving time.
Having my son get his own license is a great suggestion.  I need to do some homework on teenage driving in California, especially the insurance.

norabird

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Re: Kids school vs. financial freedom
« Reply #16 on: May 24, 2016, 06:50:08 PM »
35 minutes is still doable. If talk with your son and start putting the plan in motion.


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mozar

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Re: Kids school vs. financial freedom
« Reply #17 on: May 24, 2016, 06:51:26 PM »
You would probably come out ahead with uber too.

mskyle

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Re: Kids school vs. financial freedom
« Reply #18 on: May 25, 2016, 08:25:33 AM »
Would it be possible to sell the McMansion and *rent* a small place closer to your son's school until he graduates? I know SF rents are insane and it would likely be more expensive short-term but if you're very concerned about losing equity in the house, selling the house now and renting would eliminate that risk.

If I were you I would just stay put for another two years; you can't really time the housing market any more than you can time the stock market.